Sobeys Inc Dept: Up until early May, that’s what you’d have found in this Mississauga store. It was one of 87 Price Choppers, scattered around mainly low-income neighbourhoods in Ontario cities, that Sobeys acquired in 1998 as part of the Oshawa Group Ltd. Since then, the chain has been the unloved step-sibling in the Sobeys grocery family–which includes IGA, the rural Foodland chain, organics-heavy Thrifty Foods in B.C. and the eponymous flagship–lagging well behind rivals No Frills, owned by Loblaw Cos. Ltd., and Metro Inc.’s Food Basics. Today, however, the banner above the door reads “FreshCo,” announcing discount with a novel spin: focusing on fresh fare such as produce, baked goods and meats; catering to the neighbourhood’s ethnic tastes; and offering more choice–including three times as many types of cheese as you’d find at a typical discounter, according to Globe And Mail. The province is also where the company–a division of Stellarton, Nova Scotia-based Empire Co.–is most heavily pressing its positioning on fresh food. While FreshCo brings the focus to the discount sector, Sobeys Urban Fresh, another new banner, spins it for the upscale, downtown market. “Sobeys is probably the most successful grocer in Ontario at the moment,” says George Condon, a consultant and former editor of Canadian Grocer magazine. “And they’ve done it by dedicating themselves entirely to making their supermarkets fresh-food stores.” More from this month's Report on Business Magazine Why the wireless war is good for you Goldcorp's Big Shoes Bank's Last Frontier: Insurance The oil sands: redeemed by fire and sobeys Inc. executive Rob Adams strides briskly between bins of produce and beams before an array of more than 100 types of cheese–not package sizes or flavours, but types, from regional ricottas to the Dubliner Irish Cheese. This might not be noteworthy in a standard Sobeys, but we’re inside a discount supermarket, the kind with pallets of product on the floor, where you go to load up on a week’s necessities expecting minimal service and limited variety of stock. The new FreshCos–eight of which opened this spring on the western edge of the Greater Toronto Area–are a key part of an ongoing transformation that has put Canada’s second-biggest grocer on a roll. While its $15-billion in revenues is just half that of market leader Loblaws, Sobeys has led the industry in same-store sales growth in the past five years. But it’s in Ontario, long Sobeys’ weak spot, where changes have been most dramatic. Hobbled by outdated warehousing and inferior locations, the Ontario operation accounts for only 25 per cent of the company’s revenue, estimates CIBC World Markets analyst Perry Caicco, even though it’s home to about 40 per cent of Sobeys’ square footage. As
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24.6.10
